Palm oil advanced to the highest in almost three months on speculation that exports from Indonesia and Malaysia, the top producers, may increase ahead of the Muslim fasting month of Ramadan.
The contract for September delivery rose 0.2 percent to 2,468 ringgit ($780) a metric ton on the Bursa Malaysia Derivatives, the highest price at close for the most active futures since March 22. Palm for local physical delivery in July was at 2,470 ringgit today, according to data compiled by Bloomberg.
Shipments from Indonesia probably advanced for the first time in four months in May to 1.57 million tons from April, the median of estimates from three plantation executives, a refiner and an analyst compiled by Bloomberg showed. Exports from Malaysia jumped 18 percent to 709,860 tons in the first 15 days of this month, surveyor Intertek said June 15.
Exports from Malaysia “should increase month-on-month in June due to the expected stock-up ahead of Ramadan,” said Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd. “The news about Indonesian exports gaining should be slightly positive to the market because it shows that the demand for Ramadan is really coming in. Also, northern hemisphere is still in warm weather so palm oil is still usable.”
Demand typically picks up ahead of Ramadan, which falls in July this year, when Muslims break day-long fasts with communal meals. Palm oil clouds in cooler temperatures.
Soybean oil for December delivery was little changed at 47.90 cents a pound on the Chicago Board of Trade, while soybeans for delivery in November climbed 0.3 percent to $12.8975 a bushel. Refined palm oil for January delivery gained 0.3 percent to close at 6,272 yuan ($1,024) a ton on the Dalian Commodity Exchange, while soybean oil for delivery in the same month rose 0.7 percent to end at 7,690 yuan.